Summary
- Exxon Mobil announced large hits to Q2 earnings leading to a substantial loss for the period.
- The energy giant failed to cut the large dividend or take impairment charges on shale assets.
- The stock struggles while net debt is rising.
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No matter the pain from volatile energy prices, Exxon Mobil (XOM) continues to live in the past. The energy giant won't cut the dividend or impair vastly over priced shale assets in moves that would help the stock. My investment thesis remains highly negative on the long-term prospects of the stock until the company modernizes their investing approach.
Image Source: Exxon Mobil website
Major Q2 Earnings Hits
In a not a huge shock, Exxon Mobil outlined some large earnings hits from lower oil prices and refining margins. Brent crude prices were weak in Q1 and got far weaker during Q2 so even analysts were already expecting a large loss topping $0.50 per share.
At the end of last week, Exxon Mobil outlined an expected $2.3 billion hit to upstream earnings from lower oil prices and another $0.5 billion loss from gas prices. The end result is an earnings dip of ~$2.8 billion from a level of only $1.2 billion in Q1.
